The New Yorker - Do ads still work?

The New Yorker asks the question: Do ads still work?

The path to profits was once fairly straightforward: clients paid agencies fifteen per cent of each advertising dollar, and most of those dollars went to the three television networks. In 1965, advertisers could reach eighty per cent of their most coveted viewers—those between the ages of eighteen and forty-nine—just by buying time on CBS, NBC, or ABC. “You could put together a media plan in an hour,” Roy Bostock, the former chairman and C.E.O. of the MacManus Group, recalls. “When we introduced Scope, in the mid-sixties, we were able with television advertising in the first four weeks of the ad campaign to reach more than ninety per cent of U.S. television households ten times.”

By the late nineties, some clients began to rebel against paying a flat commission, preferring fees, usually billed by the hour. (Linda Kaplan Thaler says, “I sometimes worry that clients are paying us for the hours we spend working on projects rather than the worth of the ideas.”) And the agencies have long since left Madison Avenue—a street now frequented mostly for its luxury stores—for other parts of Manhattan and the rest of the world. But the name remains a synonym for an industry that bears little resemblance to what it once was.